4.3.2.35 Deductions from PLP to Avoid Overpayment of ISP

Introduction

From 1 October 2016, where a person is in receipt of an income support payment (ISP) and is granted PLP in arrears which may result in an overpayment of their ISP, Centrelink may deduct an ISP overpayment amount from a person's PLP arrears instalment (1.1.I.80) to avoid a debt. This is because PLP is counted as income for income support payment purposes (see 1.2.2.20).

Only the overpayment amount due to the assessment of PLP under the ISP income test can be deducted from PLP arrears. Overpayments of ISP for other reasons, or for the person's partner, cannot be deducted.

Example: Lily works 10 hours a week and also receives DSP. She gives birth to her first baby on 1 November 2016. Lily lodges a claim for PLP on 25 November 2016 which is granted from 1 November 2016. To avoid an overpayment of Lily's DSP received for the period 1 November to 25 November, Centrelink deducts the calculated overpayment amount from her lump-sum PLP arrears payment.

Note: Deductions are able to be made by Centrelink where a person has a child born or entrusted into their care on or after 1 October 2016, whether the claim for PLP was made before, on or after that date.

Act reference:PPLAct section 69A Deductions to avoid overpayment of income support payment